"The Donors Are Taking the Place of the State"

A group of 40 American billionaires, led by Bill Gates and Warren Buffett, has publicly vowed to donate at least half of their wealth to philanthropic causes. Gates and Buffett, through their project The Giving Pledge, hope to persuade the 400 richest Americans to join them. If successful, the duo could generate an unprecedented $600 billion for charity (Americans as a whole donate about $300 billion a year). A laudable example of pure altruism, right? German shipping tycoon Peter Krämer thinks not: “You can write donations off in your taxes to a large degree in the USA,” Krämer told Der Spiegel. “So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That’s unacceptable.” [%comments]

COMMENTS: 58

Wow – that’s a pretty cold assessment of what is clearly altruism to a substantial degree. Are they going to get a sizable tax write-off as a result? Absolutely. A tax write-off to the tun of half their fortune? Not even close.

I find this situation to be an unacceptable failure of national policy. It is our national economy and our tax system that allow this wealth to be accumulated. Then private parties make a decision as to which public projects or causes will be benefited.

The decisions as to how so much wealth should be directed to which public purposes should be made through a democratically responsible process.

Stated differently, if the U.S. had European type maximum tax rates of around 50% and really taxed all income without mesh of deductions, the application of those billions would be decided through democratic processes, not individual whim.

Phrasing the choice as “donate or pay taxes” is fairly disingenuous. Charitable donations are tax write-offs, not tax credits. They reduce your taxable income, so the only way to pay no taxes is to donate nearly all of your income.

All those billions to all those alleged charities will give rise to a new breed of opportunistic capitalist – the Charity CEO- whose exorbitant salary will be justified by the huge task of throwing crumbs to the hoi polloi. Democracy replaced by Plutocracy – they decide where the money goes, they get the vote, and only the little people pay the taxes.

Bill Gates and Warren Buffett have created thousands of jobs and wealth for Americans simply by following their capitalist pursuits. I trust they can handle philanthrophy infinitely better than the US Government.